Ever feel as though you aren’t getting all you want from your distributors? Is your budget taking a beating each month due to the rising costs of the products you buy? Maybe it’s time to take a deeper look into exactly what your distributor partner is doing to help you lower your costs.
Over thirty years ago, Kaman Account Managers were faced with the same challenge, and customers were asking what we were doing for them. To best address this question and prove their wealth, these Account Managers began documenting their activities throughout their customers’ facilities, working with plant personnel to implement processes for identifying problems, exploring alternatives and providing solutions. Ultimately the concept led to the first Documented Savings™ program.
The program quickly caught on, causing a rippling effect across various areas of the plant including maintenance, production, storeroom, energy management, purchasing and other departments. Savings were identified in each area and recorded with copies placed in small binders for all to see. Annual reviews and goals were put in place, and everyone was encouraged to participate in the program as the idea spread to other plants.
Just as they were generated at the program’s inception, savings today are realized through unit cost reduction, OEM conversions, application upgrades, process improvement, energy efficiency, inventory reductions and product standardization. Values vary per application, but in the end they all drive positive bottom line results.
For example, you may purchase a spare part from an OEM, only to find out upon its arrival that the part is exactly like ten other parts on your shelf, but three times more expensive. You could also want to realize longer product life within a specific application, as maintenance spends a tremendous amount of time every week replacing those parts. Once higher quality parts are selected, checked for proper application and applied, costs for parts and will labor begin to decrease. It is critical when documenting your savings to look at all applications as a whole, and not at specific one-off components. While replacing one part with a higher quality product may solve one problem, it may not solve all of the issues that need to be addressed. In every case, documenting these changes, recording results, monitoring progress and reapplying the solution to other like applications will help drive positive bottom line results within your operation.
Today, Documented Savings has become the normal means by which we report our actions throughout our customers’ plants. The program has expanded and is shared among other plants so that everyone can benefit from the specific solutions implemented.
The next time you are challenged with the need to separate quality suppliers from others, think of the Documented Savings program and think of Kaman.
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